Archive for the ‘Chart School’ Category

Junk Bonds About To Send Stocks A Bearish Message?

Courtesy of Chris Kimble

Are junk bonds about to send stocks an important message? It looks like it from this chart!

Junk Bond ETF (JNK) has created a series of lower highs and lower lows over the past couple of years, inside of falling channel (1). When it broke support in early 2018 at (2), stocks struggled to make much upward progress for the next few months.

The rally off support last year saw JNK hit falling resistance a few months ago and some softness has set in. The small decline of late has it testing a series of higher lows at (3).

What JNK does at (3), looks to send an important short-term message to the broad markets.

Either support is going to hold or will give way. Either way, its price action in the short-term should be very important to stocks! 

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New York Stock Exchange Double Topping or Sending A Strong Bullish Message?

Courtesy of Chris Kimble

A very broad index is testing last year’s highs, as monthly momentum is creating lower highs? Which indicator is more important, price or momentum?

This chart looks at the New York Stock Exchange Index (NYSE) on a monthly basis over the past 15-years.

The index peaked in January of 2018, as momentum was the highest since the peak in 2007.

The rally off the lows around Christmas last year, has the index testing the highs of January 2018. While the rally has taken place over the past 12-months, lofty momentum has created a series of lower highs.

Can you believe that this index has lagged the S&P 500 since June of 2008!

Bottom line; Price is the only thing that pays! If this lagging index would happen to break above last year’s highs, it would send the S&P a bullish message.

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Which Secular Bull Market Is It – 1950s Or 1920s?

Courtesy of Lance Roberts via RealInvestmentAdvice.com

The following comment was recently making its way around the “twittersphere” suggesting a “new secular bull market” has started.

This isn’t the first time such a call has been made. 

“Despite concerns in the third quarter, bears never had a strong argument for why stocks were overvalued and the major indexes simply traded sideways for much of the last six months, wrote Robert Sluymer, technical strategist at Fundstrat Global Advisors.

“We ‘continue to view the market cycle as being a normal pause in an ongoing secular bull market similar to what developed in 2016, 2011 and the ‘cycle’ pullbacks that developed during the secular bull markets in the 50s-60s and 80s-90s.”

It is an interesting point. The current bull market certainly seems unstoppable, but the question that must be answered, fundamentally, is if this is indeed a “secular bull market,” and if so, “where are we” within that cycle.

What is a “secular market?”

“A secular market trend is a long-term trend which lasts 5 to 25 years and consists of a series of primary trends. A secular bear market consists of smaller bull markets and larger bear markets; a secular bull market consists of larger bull markets and smaller bear markets.”

In a “secular bull’ market, the prevailing trend is “bullish” or upward-moving. In a “secular bear” the market tends to trend sideways with severe drawdowns and sharp rallies.

However, what truly defines long-term secular markets are valuations, and whether those valuations are contracting or expanding.

The chart above shows the history of secular bull market periods going back to 1871 using data from Dr. Robert Shiller. One thing you will notice is that secular bull markets tend to begin with CAPE 10 valuations around 10x earnings or even less. They tend to end around 23-25x earnings or greater. (Over the long-term valuations do matter.)

As noted above, what drives long-term secular “bull” markets is “valuation expansion.” In order to have the magnitude of “valuation expansion” needed to support


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Dow Megaphone Breakout Continues, As It Tests 77-Year Breakout Level

Courtesy of Chris Kimble

I’ve heard many times over the past 39-years I’ve been in the financial services business that charts have memories? Is it true they do? Is it possible that they have very long-term memories?

This theory looks to be put to a big test by the chart above, which looks at the Dow Jones Industrial Index since 1910.

The Dow has spent the majority of the past 77-years, inside of rising channel (1). While inside of this channel, it looks to have created two very long-term megaphone patterns.

It broke above the first megaphone pattern in the early 1980s, where it used old resistance as new support at (2). After support was tested and held, the Dow experienced a very strong rally for nearly 18-years.

It again broke above megaphone resistance and used it as support again at (3), and another strong rally is taking place. The rally off support point (3), has the Dow currently testing the top of the 77-year channel, which is created by connecting the 1929 and 2000 highs.

With the trend being strongly higher, will the Dow breakout and forget that it is testing the top of this long-term channel or will the Dow remember that the top of this channel is in play and take an important breather?

I will discuss this chart and many more in our Free Webinar this Wednesday. I would be honored if you could join us in discussing what key inflection points we fell are opportunities at this time.

To sign-up for the webinar CLICK HERE.

To become a member of Kimble Charting Solutions, click here.





Dow Jones cycle update and are we there yet?

Courtesy of Read the Ticker

dow-jones-cycle-update-and-are-we-there-yetToday the Dow and the SP500 are making new all time highs. However all long and strong bull markets end on a new all time high. Today no one knows how many new all time highs are to go, maybe 1 or 100+ more to go, who knows! So are we there yet?

readtheticker.com combine market tools from Richard Wyckoff, Jim Hurst and William Gann to understand and forecast price action. In concept terms (in order), demand and supply, market cycles, and time to price analysis. 

Cycle are excellent to understand the wider picture, after all markets do not move in a straight line and bear markets do follow bull markets. 

CHART 1: The Dow Jones Industrial average with the 900 period cycle.

A) Red Cycle: The 900 period cycle (or 880) is the dominate cycle in the Dow Jones. 

B) Notice how the cycle low 1,2,3 and hash [#] is timed with market recession (in order): 1982, 1991, 2001, 2008 (out of sync). The last has a recession forecast for late 2020 or 2021 [a maybe].

C) CAUSE 1, CAUSE 2 and CAUSE 3 are the normal stepping stones of Richard Wyckoff cause and effect logic. Very typical price action: market rallies, consolidation, rallies, consolidation, you guess it, it rallies. Of course if a rally does not follow a consolidation then the ’cause and effect’ confidence trend is broken. So far this is has not happened. This is why one can not be bearish to any strong degree, the bullish status quo continues.

D) RTT Momentum reflects price momentum relative to the cycle. The current position of momentum is elevated and bullish.

Click for popup. Clear your browser cache if image is not showing.
Dow Cycle

CHART 2: Below is the Richard Wyckoff Point and Figure 1 to 3 risk reward forecast.

A) As the above Dow Jones cycle suggest markets are still bullish, and CAUSE 3 forecast suggest the SP500 can reach at least 3,400
B) And why not, price has done this twice before.

Click for popup. Clear your browser cache if image is not showing.
SP500 PnF Forecast

The $64,000 dollar question is next.

Question: Is the above cycle a mid or late cycle event?

A late cycle event is when…
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Below-Average Bull Market

 

Below-Average Bull Market

Courtesy of 

My Chart o’ the Day comes from LPL’s Ryan Detrick, who notes that:

Many consider this bull market the greatest ever, given it has incredibly lasted more than 10 years. But in terms of magnitude, many would be surprised to hear that the 357% gain during this bull market is still beneath the record 417% gain seen during the 1990s.

This bull market also isn’t the strongest in history in terms of gains, even though it has lasted longer than any other bull market…On an annualized return basis, this bull market has gained 15.3%, which is actually weaker than the average bull market annualized gain of 18.9%.

OK, it’s a table, not a chart. But still.

Source:

Putting the Bull Market in Perspective
LPL Research – November 12th, 2019





Silver Testing This Support For The First Time In 8-Years!

Courtesy of Chris Kimble

Its been a good while since Silver bulls could say that it is testing support. Well, this week that can be said! Will this support test hold? Silver Bulls sure hope so!

This chart looks at Silver Futures over the past 10-years. Silver has spent the majority of the past 8-years inside of the pink shaded falling channel, as it has created lower highs and lower lows.

Silver broke above the top of this falling channel around 90-days ago at (1). It quickly rallied over 15%, before creating a large bearish reversal pattern, around 5-weeks after the breakout.

Since creating the large bearish reversal pattern, Silver lost all of its short-term rally. It is now testing the top of the old falling channel as potential new support at (2).

While it is testing potential support, it is also testing its 200-week moving average at the same price point.

The last time Silver tested the green falling channel as support was back in 2012, reflecting is been a long time since Silver bulls have experienced a support test!

Silver bulls want/need to see support hold at (2)! What it does here will most likely send an intermediate message to this precious metal.

To become a member of Kimble Charting Solutions, click here.





Bank Breakout Of Financial Crisis Highs or Double Topping Again?

Courtesy of Chris Kimble

If the saying “So Goes The Banks, So Goes The Broad Market” is true, banks are facing a critical breakout/resistance test in my opinion.

This chart looks at Financials ETF (XLF) over the past 12-years. This chart reflects that a double top took place prior to the financial crisis getting started.

XLF has remained inside of rising channel (1) since the lows in 2012. It hit double resistance at (2), then it declined nearly 25%.

The decline then tested rising support at (3) and a strong rally has followed. The rally now has XLF nearing the Financial crisis double top and last years highs at (4).

Will XLF breakout above the old highs or is it creating another double top again?

What XLF does at (4), could well send important messages to the broad market and stocks around the world. Stay tuned friends, this looks to be a key price test!!!

To become a member of Kimble Charting Solutions, click here.





Gold Indicator Sending Fresh Bearish Message, Says Joe Friday!

Courtesy of Chris Kimble

Could the Gold/US Dollar ratio be sending a fresh concerning message to Gold bulls this week? Joe Friday says Yes!

This chart looks at the Gold/Dollar ratio over the past 8-years.

The intersection of two long-term channel met at (1) a few months ago. The ratio was testing the bottom of one as resistance and the top of another as resistance at the same time.

As the ratio was testing both channels as resistance, a sizeable bearish reversal pattern took place at (1).

Since the reversal pattern took place, the ratio has been heading lower.

Joe Friday Just The Facts Ma’am; The ratio is breaking below rising support and hitting lows of the past few months at (2). This sends a negative message to the metals sector.

To become a member of Kimble Charting Solutions, click here.





Home builders About To Experience Super Bullish Breakout?

Courtesy of Chris Kimble

Is a very important sector of the U.S. economy about to experience a 13-year breakout? Possible!

This chart looks at Homebuilders ETF (XHB) over the past 13-years.

XHB peaked in 2016, almost a year before the broad market started feeling the impact of the upcoming financial crisis.

XHB’s rally off the 2009 lows saw it test the 2006 highs again in 2018, before it declined nearly 30%; as a breakout attempt was unsuccessful.

XHB’s rally off the December 2018 lows, has it testing its 2006 and 2018 highs again at (1).

Will XHB breakout or peak again at prior highs? What it does at (2), should send an important message to the broad market!

To become a member of Kimble Charting Solutions, click here.





 
 
 

Phil's Favorites

E-scooters, bikes and urban mobility: lessons from the streets of Paris

 

E-scooters, bikes and urban mobility: lessons from the streets of Paris

Rue des Tournelles, Paris, November 5, 2019. Four Voi scooters wait hopefully for potential clients, with a Lime and Dott sprawling nearby. Behind them, a Velib’ rider has made his choice. Leighton Kille/The Conversation France , CC BY

Courtesy of Tiago Ratinho, IÉSEG School of Management

Mobility is a crucial challenge for global cities in the 21st century. The growing impact and ...



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Zero Hedge

Victoria's Secret Caves To SJW Critics, Cancels Fashion Show

Courtesy of ZeroHedge View original post here.

To all of those pro-inclusivity activists who accused Victoria's Secret of being the paragon of "outdated" sensibilities when it comes to female beauty, congratulations: You won.

The New York Times reports that the lingerie company's annual fashion show has been cancelled as the brand struggles with its longtime CEO's association with Jeffrey Epstein, the convicted pedophile who allegedly killed himself (or was murdered) in his prison cell in ...



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Insider Scoop

4 Energy Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Seadrill, Inc. (NYSE: SDRL) shares surged 6.2% to $1.03 during Friday's pre-market session. The market cap stands at $176.0 million.
  • Chesapeake Energy, Inc. (NYSE: CHK) stock moved upwards by 2.3% to $0.59. The market value of their outstanding shares is at $2.6 billion. According to the most recent rating by Morgan Stanley, on November 13, the current rating is at Equal-Weight.
  • Halliburton, Inc. (NYSE: HAL) stock rose 0.7% to $21.25. The market value of their outstand...


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Digital Currencies

Bitcoin Busts Below $8,000 To One-Month Lows

Courtesy of ZeroHedge View original post here.

Another sea of red across cryptos this morning after tumbling in early European trading (it's been an ugly 7 days as the image below shows)...

Source: Coin360

Bitcoin Cash is leading the decline on the week along with Litecoin...

Source: Bloomberg

But Bictoin's psychological plunge to a $7k handle is most notable...

Source: Bloomberg

...



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Kimble Charting Solutions

Junk Bonds About To Send Stocks A Bearish Message?

Courtesy of Chris Kimble

Are junk bonds about to send stocks an important message? It looks like it from this chart!

Junk Bond ETF (JNK) has created a series of lower highs and lower lows over the past couple of years, inside of falling channel (1). When it broke support in early 2018 at (2), stocks struggled to make much upward progress for the next few months.

The rally off support last year saw JNK hit falling resistance a few months ago and some softness has set in. The small decline of late has it testing a series of higher lows at (3).

What JNK does at (3), looks to sen...



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Lee's Free Thinking

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

 

NY Department of Welfare Announces Increased Subsidies for Primary Dealers, Thank God!

Courtesy of , Wall Street Examiner

Here’s today’s press release (11/14/19) from the NY Fed verbatim. They’ve announced that they will be making special holiday welfare payments to the Primary Dealers this Christmas season. I have highlighted the relevant text.

The Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York has released the schedule of repurchase agreement (repo)...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Chart School

Dow Jones cycle update and are we there yet?

Courtesy of Read the Ticker

Today the Dow and the SP500 are making new all time highs. However all long and strong bull markets end on a new all time high. Today no one knows how many new all time highs are to go, maybe 1 or 100+ more to go, who knows! So are we there yet?

readtheticker.com combine market tools from Richard Wyckoff, Jim Hurst and William Gann to understand and forecast price action. In concept terms (in order), demand and supply, market cycles, and time to price analysis. 

Cycle are excellent to understand the wider picture, after all markets do not move in a straight line and bear markets do follow bull markets. 



CHART 1: The Dow Jones Industrial average with the 900 period cycle.

A) Red Cycle:...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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